Jet fuel inventories decline in Europe and supply chain is affected
The contraction in jet fuel supply and the drop in inventories to a seven-year low have raised concerns about cost pressures that could be reflected in airline ticket prices.
The deepening jet fuel supply shortage across Europe and the decline of inventories to their lowest level in the past seven years have brought about concerns that operational expenses for airlines may increase and reflect on ticket prices.
Tightness in Jet Fuel Supply
While the tightness in jet fuel supply is deepening across Europe, the continent's inventories have fallen to their lowest level in the last seven years.
Impact of Conflicts in West Asia
Disruptions in traditional supply routes due to conflicts in West Asia have driven Europe to seek fuel procurement from more distant sources.
Expected Fuel Deficit
According to analyses, Europe is expected to face a jet fuel deficit of 510,000 barrels per day in the fourth quarter of the year, while supply surpluses are projected in different regions.
Shift to Distant Supply Points
Countries aiming to reduce the supply deficit in Europe have turned to more distant supply points such as Nigeria, the US, Canada, and South Korea in recent months.
Increase in Shipments from South Korea
Jet fuel shipments from South Korea to Europe are expected to reach approximately 129,000 barrels per day in September.
Seven-Year Low in Inventories
Jet fuel inventories in the Amsterdam-Rotterdam-Antwerp region dropped to their lowest level in seven years during the week of September 10.
Pressure on Airline Costs
Jet fuel is among the most important cost items for airlines, and this supply crunch creates additional pressure on operational expenses.